Key Takeaways
- • Savory Fund, the Salt Lake City private-equity firm behind restaurant chains Bonrue Bakery, Hawkers Asian Street Food, and Via 313 Pizzeria, closed its third fund at $201.5 million, according to Restaurant Business Magazine.
- • The fund was oversubscribed despite a difficult fundraising environment, with global middle market fundraising down 7% in the first half of the year per S&P Global and emerging managers' share of private-equity capital falling to 11.6% from 18.6% a decade earlier per Nuveen.
- • Savory raised its final $60 million in the last three months of the fundraising cycle after acquiring South Block, Bonrue Bakery, Hawkers Asian Street Food, and Zao Asian Café, which demonstrated it could still source assets.
- • More than a third of the new fund has been deployed, with the firm targeting four or five more deals; CEO Clay Dover leads the restaurant operating team.
Summary
Savory Fund, a Salt Lake City private-equity firm, has closed its third fund with $201.5 million in commitments, an oversubscribed result that Restaurant Business Magazine characterizes as notable given current market conditions. Co-founder and managing director Andrew Smith described the raise as the hardest of his career. The firm's portfolio includes Bonrue Bakery, Hawkers Asian Street Food, and Via 313 Pizzeria, and it was an early investor in the dirty soda concept Swig and acquired Mo'Bettahs, Houston TX Hot Chicken, and Saigon Hustle.
The fundraising backdrop is challenging. According to S&P Global, global middle market investment fundraising fell 7% in the first half of the year, and 194 middle market funds closed last year, down 21% from the prior year. Nuveen data cited in the article show emerging managers, defined as firms on their first three fundraises, captured 11.6% of private-equity capital raised, down from 18.6% a decade earlier. Restaurant valuations are also down since 2021, creating a slowdown in exits that the article describes as a "logjam."
To demonstrate it could still source deals, Savory acquired the acai brand South Block, then Bonrue Bakery, Hawkers Asian Street Food, and more recently Zao Asian Café. Smith said the firm raised the final $60 million in the last three months of the cycle because investors saw the portfolio performing. Savory's model involves investing in growth restaurant chains, retaining founders, keeping debt low, and emphasizing cash flow, with support from a restaurant-experienced team led by CEO Clay Dover.
The firm's history includes its founders, Andrew and Shauna Smith, opening a Kneader's Bakery and Café in Lehi, Utah, in late September 2008, days after the Dow fell 777 points on September 29 that year. The couple later owned about 140 restaurants, including Kneaders and Little Caesars, before selling the business and launching Savory. Its first fund, $100 million, closed in 2020, and its second closed in 2021. Swig was sold to The Larry H. Miller Company in 2022, and Mo'Bettahs was sold to Blue Marlin Partners and Trive Capital in 2024. More than a third of the third fund is deployed, and the firm is working on additional investments.
The fundraising backdrop is challenging. According to S&P Global, global middle market investment fundraising fell 7% in the first half of the year, and 194 middle market funds closed last year, down 21% from the prior year. Nuveen data cited in the article show emerging managers, defined as firms on their first three fundraises, captured 11.6% of private-equity capital raised, down from 18.6% a decade earlier. Restaurant valuations are also down since 2021, creating a slowdown in exits that the article describes as a "logjam."
To demonstrate it could still source deals, Savory acquired the acai brand South Block, then Bonrue Bakery, Hawkers Asian Street Food, and more recently Zao Asian Café. Smith said the firm raised the final $60 million in the last three months of the cycle because investors saw the portfolio performing. Savory's model involves investing in growth restaurant chains, retaining founders, keeping debt low, and emphasizing cash flow, with support from a restaurant-experienced team led by CEO Clay Dover.
The firm's history includes its founders, Andrew and Shauna Smith, opening a Kneader's Bakery and Café in Lehi, Utah, in late September 2008, days after the Dow fell 777 points on September 29 that year. The couple later owned about 140 restaurants, including Kneaders and Little Caesars, before selling the business and launching Savory. Its first fund, $100 million, closed in 2020, and its second closed in 2021. Swig was sold to The Larry H. Miller Company in 2022, and Mo'Bettahs was sold to Blue Marlin Partners and Trive Capital in 2024. More than a third of the third fund is deployed, and the firm is working on additional investments.
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